The sale of Israeli automated optical inspection equipment company Orbotech Ltd. (Nasdaq: ORBK) to KLA-Tencor will be completed on Wednesday, after the companies obtained approval from the authorities in China. The deal, which was first reported 11 months ago, was originally slated to be closed in late 2018, but was postponed due to delay in obtaining Chinese approval. The companies announced that they hoped to obtain approval "as soon as possible in 2019." The delay resulted from the trade war between China and the US, which caused other deals to be called off last year. More than 30% of Orbotech's trade is with China.
The two companies today reported that they had obtained approval from Chinese regulator SAMR, which handles antitrust matters, and that completion of the deal was now scheduled for February 20.
Orbotech, managed by CEO Asher Levy, provides technologies for use in advanced electronics production processes. The company has three primary markets: flat panel displays (FPDs), printed circuit boards (PCBs) and semiconductor devices (SDs). KLA, a US company, is one of the world's largest manufacturers of chip industry equipment with a current market cap of $16.4 billion.
KLA-Tencor's acquisition of Orbotech is a cash and shares deal. It will pay $38.86 cash and 0.25 of its shares for each share of Orbotech. At the time that the deal was originally reported, the consideration was worth $69.02 for each Orbotech share, and $3.4 billion in total. As of now, following a drop in KLA-Tencor's share price and its subsequent recovery, the proceeds for each Orbotech shares stand at $65.88, amounting to $3.26 billion, fully diluted.
Orbotech's current share price is $62.90, 4.5% short of the price in the deal, reflecting the market's concern about the future of the deal.
Published by Globes, Israel business news - en.globes.co.il - on February 18, 2019
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